Google results hit by recession

Google has posted its first revenue decline since listing as a public company, after being hit by the recession.

Dan Nystedt
April 17, 2009

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Google has posted its first revenue decline since listing as a public company, after being hit by the recession.

The world's largest internet search company marked several negative firsts in the quarter just passed, despite beating Wall Street's expectations in a tough economic environment.

Revenue for the first quarter fell to $5.51 billion (£3.72 billion), down three per cent compared to the fourth quarter of last year.

It was Google's worst quarterly revenue performance since the $5.37 billion in revenue it reported in the second quarter last year.

Total advertising revenue, a key metric followed by analysts, fell 3 per cent compared to the fourth quarter, its first drop on record.

The company's permanent head count also fell for the first time since it began reporting, to 20,164 compared to 20,222 in the fourth quarter, according to its Web site.

Google reported other negative firsts in the quarter, including the growth rate on Google Web sites, which fell 3 per cent compared to the fourth quarter and hit a record low of 9 per cent on a year-to-year basis.

Google Network Web site growth also turned negative for the first time on a year-to-year basis, by 3 per cent.

The company's traffic acquisition cost as a percentage of revenue, at 26 per cent, tied with the fourth quarter of last year as the lowest on record.

Google also reined in its capital spending, to just $262.8 million, the lowest level since the fourth quarter of 2005, when it spent $245.8 million and its revenue was around a third of what was reported Thursday.

The company's stock fell a slight 0.1 per cent in after-market trading to $388.24.